The author, Chibo Tang, is a managing partner at Gobi Partners.
Over the last few years, more paths to public listings have emerged. Traditional IPOs were once viewed as the default option for liquidity, but more startups are exploring alternatives like special purpose acquisition companies (SPACs), and reverse takeovers (RTOs). These options serve as faster, founder-friendly routes to public markets.
For more than 20 years, Gobi Partners has guided startups through different kinds of listings.
Our experience partnering with founders through non-traditional exits underscored the importance of understanding all options, especially when market conditions are difficult. SPACs and RTOs were once viewed as unconventional, but they’re becoming increasingly routine for growth-stage companies navigating a limited exit environment.
SPACs and RTOs were once viewed as unconventional, but they’re becoming increasingly routine.
Even before the number of IPOs fell, the traditional listing process was challenging for startups.
The process is lengthy, typically clocking in at up to a year for Hong Kong or United States listings, and also very expensive. Underwriting fees charged by investment banks are the most significant direct costs of IPOs and can be as high as 7% of total gross proceeds.
Companies going through IPOs also risk market volatility. In 2023, for example, total IPO fundraising in Hong Kong dropped 56% year-over-year to HK$46.3 billion.
In contrast, SPACs and RTOs give companies a route that is less costly and faster, ensuring that they don’t lose momentum as they pursue liquidity. SPACs typically take just three to six months after a merger agreement is signed, while an RTO is usually about four to eight months. Both typically involve lower upfront costs than traditional IPOs and involve less regulatory hurdles.
To be sure, many investors remain wary of SPACs after the 2020-2023 boom in the US.
In 2022, three out of four companies that went public in the U.S. did so through a SPAC. The rush to go public meant too many SPACs were chasing a limited number of viable acquisition targets, resulting in flimsy due diligence. Many SPACs merged with pre-revenue startups at inflated valuations, and the bubble soon popped, with SPACs underperforming the S&P 500.
Fortunately, the lessons learned from the SPAC boom’s mistakes resulted in stronger safeguards for both investors and startups. The US Securities and Exchange Commission (SEC) implemented several new rules, including more disclosure requirements. In Asia, markets like Hong Kong and Singapore have spent time crafting their frameworks to ensure that SPACs are sustainable.
The lessons learned from the SPAC boom’s mistakes has resulted in stronger safeguards.
Hong Kong, for example, requires SPACs to target companies that have a minimum market capitalisation of $100 million, along with backing from institutional PIPE investors. In Singapore, at least 90% of IPO proceeds are held in an escrow account and sponsors are subject to a six-month lock-up. Both environments encourage careful examination of target companies’ business fundamentals and revenue traction, reducing the risk of another bubble.
Alongside SPACs, there is also growing interest in RTOs. In an RTO, a startup acquires a listed shell company, helping them avoid the expense and time commitment of extensive promotion. It gives more control over timing, making it a good option for companies that are planning strategic deals. By merging with an existing company, startups that chose an RTO have a more predictable path to going public. RTOs can include private placements, enabling companies to boost their war chests by raising private capital alongside the takeover.
In the current market environment, SPACs and RTOs provide attractive routes for companies that are ready to go public, but have been stymied by the drop in traditional IPOs. In 2024, Asia-Pacific IPO activity declined 35% in deals and 51% in proceeds year-over-year, thanks to inflation, higher interest rates and slower economic growth. The outlook for IPO activity remains mixed and continues to be impacted by breaking developments like the new tariffs imposed by the US.
Despite their advantages, the success of SPACs and RTOs are still subject to market sentiment. But the second half of 2025 presents a window of opportunity for several reasons. One of the most important is macroeconomic tailwinds. While the U.S. tariffs have recently introduced more uncertainty, anticipated easing in the near to medium term is expected to unlock institutional capital, reviving appetite for listings.
Tech startup valuations in Asia may also be recovering, and that will bring more public investors and late-stage startups to the table. Companies prepared to be early movers have several advantages, like less competitors for investor attention.
More of Gobi Partners’ portfolio companies are choosing alternative routes, sometimes setting precedent in the process. In 2023, Synagistics became the first startup to complete a de-SPAC listing in Hong Kong after merging with HK Acquisition Corp in a deal that valued the startup at HK$3.5 billion. The agreement came with HK$551 million from ten PIPE investors. Synagistics is based in Singapore and not only did its de-SPAC provide an exit route, but also boosted its Asia expansion strategy by placing it closer to potential clients and investors in Greater China.
Another example is Amber Premium, which listed on Nasdaq in March 2025 through an RTO. The transaction fast-tracked Amber Premium’s access to US markets, while reassuring investors with the transparency and credibility of a Nasdaq listing.
Synagistics and Amber Premium’s successes are not isolated, but part of a growing trend toward alternative listings. A one-size-fits-all approach to going public no longer works for many startups. We encourage companies to weigh their readiness carefully. At Gobi Partners, we work with our portfolio companies to ensure their financial reporting meets public-market standards and to strengthen governance structures.
We also cultivate sponsor partnerships by pre-negotiating terms with top SPAC teams or vetting shell companies for RTOs. Just as importantly, we encourage a dual-track approach, considering traditional IPOs alongside the alternative pathways. This allows companies to respond quickly to windows of opportunities, instead of scrambling to catch up.
While the past few years have been challenging, they have also written a new chapter for startups. Having more exit options means founders can better tailor their strategies to fit the needs of their companies. Thriving in the new landscape means understanding all available pathways, making sure exit methods fit into overall growth plans, and remaining flexible. We expect SPACs and RTOs to become increasingly mainstream. Ultimately, having more ways to exit benefits the overall ecosystem by ensuring startups have the resources they need to continue growing and innovating.
